Semiconductor industry attracts $7 b in investments

Bangalore: India's semiconductor industry has already attracted $7 billion (Rs 28000 crore) in committed investments, less than a year after the government announced an ambitious policy to promote chip manufacturing and create an ecosystem for chip design services, a top official said Monday.

These firms are especially keen on making solar photovoltaic (PV) cells for domestic and export markets, Minister of State for Commerce Jairam Ramesh said here.

Telecom, especially mobile, consumer electronics and personal computers (PCs), automotive sector and office automation (OA) would be the key drivers for increasing consumption of chips in the private domain, while energy devices, medical equipment for public healthcare and e-governance in the public domain would drive the semiconductor industry, he said while inaugurating the two-day Indian Semiconductor Association (ISA) Vision Summit 2008.

"The emergence of electronic manufacturing services and the setting up of production plants by global majors such as Nokia and Motorola for mobile handsets, assembling plants by Dell, HP and Lenovo for PCs and assembly lines for consumer durables and white goods by LG, Samsung and Whirlpool have created huge potential for the semicon industry spanning design services and chip manufacturing," he told the 500 delegates at the summit.

Ramesh said south India would emerge as a global hub for semiconductor and electronics industries in the near future as the chip design services in Bangalore, chip manufacturing in Hyderabad and product manufacturing in Chennai constitute a triangle.

"Besides the committed investments, five proposals with a combined investment of $800 million (Rs 3200 crore) have been given in-principle approval for setting up captive PV cell manufacturing facilities in the Fab City coming up in Hyderabad," Ramesh told reporters at the summit.

Three proposals from Videocon ($250 million), Moser Baser ($2 billion) and Hindustan Semiconductor Manufacturing Co ($1 billion) for setting up manufacturing facilities in semiconductors and solar PV cells are being actively considered by the government.

"Reliance Industries has made an expression of interest to set up a mega solar PV cell plant with an upfront investment of $5 billion (Rs 20000 crore) at Jamnagar in Gujarat," he said.

Giving the break-up of committed and proposed investments in the emerging semiconductor sector, Ramesh said SemIndia Systems Ltd would invest $3 billion (Rs 12000 crore) to set up an ATMP (assembly, test, marking and packaging) facility in phase one and a fabrication unit to make silicon chips for domestic and export markets in phase two by 2011.

"Neotech Solutions India will invest $2 billion (Rs 8000 crore) to manufacture solar PV cells as part of the ecosystem being built in the Fab City. The Delhi-based company has been allotted 50 acres of land.

"Similarly, Hyderabad-based Solar Semiconductor will invest $1 billion (Rs 4000 crore) to produce high-quality PV modules. Titan Energy Systems Ltd, another Hyderabad-based leading PV modules manufacturer, will invest $750 million for setting up its second unit in the Fab City, which has been given the special economic zone (SEZ) status."

Solar Semiconductor has also been allotted 50 acres in the 1,200-acre Fab City, located near the greenfield Rajiv Gandhi International Airport at Shamshabad on the outskirts of Hyderabad.

Three other companies, which have been cleared to set up their PV cells manufacturing units, are XL Telecom and Energy Ltd ($75 million), KSK Energy Ventures Ltd ($70 million) and Embedded Systems Solutions ($5 million).

The first two firms, which are Hyderabad-based, have been allotted 50 acres each, while the third firm (Bangalore-based Embedded Systems) has been given 10 acres.